Remittances account for more than 20 per cent of Guyana’s GDP
– Int’l Migration Report 2011
A ‘small piece’, a ‘lil raise’ … whatever it may be called, regular remittances to Guyanese from relations living in other countries are not just small pieces – they are an important sector of the Guyanese economy. Remittances, it is noted, are among the most tangible links between migration and development.
The Bank of Guyana Annual report for 2010 noted that the enactment of the Money Transfer Agencies (Licensing) Act 2009 provided BOG with supervisory oversight of money transfer activities.
According to the report there were seven agencies licensed to carry out money transfer activities and 157 registered agents in the country at the end of 2010. The value of all inbound transactions came to US$169.4M while the overall value of outbound transactions came to US$26.0M.
The report pointed out that the US currency accounted for 55.0 percent of all money transfers, Caribbean currencies 19.0 percent, Canadian Dollars 13.0 percent and Sterling 7.0 percent. In contrast, the Multilateral Investment Fund, a member of the IDB Group puts the figure for Guyanese remittances at US$374M in its 2010 Remittances report that focuses on Latin America and the Caribbean.
According to the International Migration in the Americas report, Latin American and Caribbean countries received about 20 percent of overall officially recorded remittance flows to developing countries in 2009, a ratio which corresponds to a figure of $57B.
In that report it is given that in Honduras, Guyana, El Salvador and Haiti remittances represent the highest percentage of Gross Domestic Product (GDP); accounting for between 15 and 20 percent of GDP, a fact confirmed by the Migration Policy Institute Data Hub and a World Bank Brief from the Migration and Remittances Unit of the Institution.
The report on International Migration in the Americas is the first report of the Continuous Reporting System on International Migration in the Americas (SICREMI) which is the acronym in Spanish.
The production of the report released yesterday morning is a joint effort between the Economic Commission for Latin America and the Caribbean (ECLAC) and the Organisation for Economic Co-operation and Development (OECD).
It was pointed out that remittances play an important role in the region as a source of foreign currency but also to fight poverty as well as to foster household investments in education and health. The report went on to say that an in-depth World Bank study considering 11 Latin American countries has shown that for each percentage point increase in the share of remittances in GDP, the fraction of the population living in poverty is reduced by about 0.4 percent on average.
In addition, data from household surveys suggest that migration and remittances reduce the number of persons living in poverty in six out of the eleven countries for which data are available.
World Bank estimates indicate that the officially-recorded remittance flows in 2010 totaled over US$440 billion worldwide. As in the past, developing countries received the lion’s share of global remittances (US$325 billion). It was also noted that in 24 countries, remittances were equal to more than 10 percent of the Gross Domestic Product (GDP) in 2009; in nine countries they were equal to more than 20 percent of GDP; Guyana being one of the former.
Last May in a brief released by the World Bank and examining the outlook for remittance flows for 2011-2013 the authors offer up that remittance flows have recovered to the pre-crisis levels but that they have not kept pace with inflation and national currency appreciation.
According to the brief, remittance flows are expected to grow at lower but more sustainable rates of 7-8 percent annually during 2011-13 to reach $404B by 2013. Recorded remittance flows to developing countries are expected to grow annually by about 7.4 percent in 2012 and 7.9 percent in 2013 to reach $375B in 2012 and $404B by 2013. Worldwide recorded remittance flows, including to high-income countries, are expected to reach nearly $500B in 2012 and $536B in 2013.
Of note is the fact that the data compiled by official sources such as these only captures remittances sent through formal channels such as banks and money transfer operators. According to the MPI there are currently no uniform and authoritative historical data on informal flows.
Given the widespread use of informal remittance channels such as bringing cash across borders in person, the remittance data presented in these reports may be seen as an underestimate of the actual flows.